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New York Bankruptcy Tips
- Four federal bankruptcy courts in New York
- Can retain $50,000 in home equity under Chapter 7
- Can only file once within 8 years
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Do you need to know how to file for New York bankruptcy? Bankruptcy is a drastic step that provides legal protection from creditors and gives you a financial fresh start. Although bankruptcy proceedings occur in federal court, there are some state considerations that affect the process. This page will show you how to go about filing for bankruptcy in New York State.
Filing for bankruptcy in New York follows the same procedures that are used in every state, as bankruptcy law is governed by federal statute. There is some interaction with New York State law however, that you should be aware of when contemplating filing for bankruptcy in New York.
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Chapter 7 vs. Chapter 13 Bankruptcy
A New York bankruptcy gives some common reasons for filing a Chapter 13 rather than a Chapter 7 bankruptcy. These might include: having previous ... read moreA New York bankruptcy gives some common reasons for filing a Chapter 13 rather than a Chapter 7 bankruptcy. These might include: having previously filed a Chapter 7 bankruptcy with the past 8 years, owning a house that you wish to remain in but that you are late making mortgages payments, if you are above the income threshold for a Chapter 7 bankruptcy, or if you have an asset that you wish to keep which is not a New York state exempt asset for bankruptcy purposes.
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Step 1: What is Bankruptcy?
Bankruptcy is filed in federal court (Creative Commons photo by Kim Baker)- Consumers have two forms of bankruptcy that can be used to get protection for creditors. With Chapter 7 bankruptcy, or liquidation, your creditors need to settle for partial payment and clear the remainder of your debt. How much you can keep is determined by New York state law. Chapter 13 bankruptcy does not eliminate any debt, but restructures your payment schedule to make it easier for you to pay your bills. In both cases, the collection of assets and payment to the creditors is handled by a court appointed trustee. Taxpayers with larger amounts of debt that don't qualify for Chapter 13 bankruptcy make be able to use Chapter 11 bankruptcy.
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Step 2: Where to File New York Bankruptcy
- There are four federal bankruptcy courts that cover New York State. The court you file in depends on the county you have lived in for most of the six months prior to filing.NYEB: Venue
- New York Eastern Bankruptcy Court covers Kings, Queens, Richmond, Nassau and Suffolk countiesNYEB: New York Eastern Bankruptcy Court NYEB: Venue
- New York Northern Bankruptcy Court covers Cayuga, Cortland, Jefferson, Onondaga, Oswego, Tioga, Tompkins, Franklin, Fulton, Montgomery, and St. Lawrence countiesNYNB: New York Northern Bankruptcy Court
- New York Southern Bankruptcy Court covers New York, Bronx, Westchester, Rockland, Dutchess, Orange, Putnam, or Sullivan countiesNYSB: New York Southern Bankruptcy Court
- New York Western Bankruptcy Court covers Albany, Allegany, Broome, Cattaraugus, Chautauqua, Chemung, Chenango, Clinton, Columbia, Delaware, Erie, Essex, Genesee, Greene, Hamilton, Herkimer, Lewis, Livingston, Madison, Monroe, Niagara, Oneida, Ontario,Orleans, Otsego, Rensselaer, Saratoga, Schenectady, Schoharie, Schuyler. Seneca, Steuben, Ulster, Warren, Washington, Wayne, Wyoming, or Yates counties NYWB: New York Western Bankruptcy Court
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Step 3: Chapter 7 New York State Income Test
A bankruptcy attorney can guide you through the process (Creative Commons photo by Dwonderwall)- In order to utilize Chapter 7 bankruptcy, your income must be below a certain threshold. The threshold varies by state. The 2008 New York State income levels are:Lawyers.com: Bankruptcy In New York
- Single wage earner: $44,587
- Family of two: $54,397
- Family of three: $64,673
- Family of four: $77,664
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Step 4: Chapter 7 New York State Exemptions
You can preserve some home equity when filing for bankruptcy in New York (Creative Commons photo by lumaxart)- If you meet the New York State income test, as well as the other criteria for Chapter 7 bankruptcy, your assets will be sold to pay off your debts. In New York State, however, you are able to keep:Lawyers.com: Bankruptcy In New York
- $50,000 of home equity.($100,000 if you file jointly)
- $2,400 of equity in a carhttp://www.bankruptcyaction.com/nyexemptions.htm
- $5,000 of clothing and other personal property in specific categories
- $5,000 for your family bible, family pictures, and school bookshttp://www.bankruptcyaction.com/nyexemptions.htm
- $5,000 for your wedding ring and a watchhttp://www.bankruptcyaction.com/nyexemptions.htm
- All food required to feed the family for 60 dayshttp://www.bankruptcyaction.com/nyexemptions.htm
- $5,000 of tools of the tradehttp://www.bankruptcyaction.com/nyexemptions.htm
- $450 in household petshttp://www.bankruptcyaction.com/nyexemptions.htm
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